Barfield owner avoids auction block

The owner of a key historic building in downtown Amarillo again avoided seeing it hit the auction block.

But the company faces mounting trouble in federal bankruptcy court.

Metro Tower, the company that owns the Barfield Building, paid $382,166 Monday to prevent Tuesday’s planned foreclosure auction of the property at 600 S. Polk St., according to a representative of LT Barfield, the investment group owed the debt.

“We’re pleased that somebody paid enough money that, hopefully, is going to be interested in moving forward” with redevelopment of the partially gutted high-rise, said Alan Rhodes, one of five investors involved in LT Barfield.

This was the second time LT Barfield attempted to foreclose on the court-ordered judgment and wrest control of the vacant 1927 building from Metro Tower and its managing partner, Todd Harmon.

Harmon did not immediately return a call for comment.

Metro Tower and Harmon thwarted the first auction in July by filing for Chapter 11 bankruptcy less than an hour before the sale. Chapter 11 prevents debt collection, at least temporarily, while a company reorganizes its finances.

Metro Tower and LT Barfield later negotiated a settlement that gave Metro Tower until Monday to pay up or see the building placed on the auction block.

LT Barfield bought the right to collect the debt from a Louisiana investor who reached a settlement with Metro Tower in a 2009 civil lawsuit in Dallas’ 95th District Court, resulting in a $320,000 judgment against Metro Tower, plus penalties and interest.

“We got involved with this project because we wanted Sixth (Avenue) and Polk to have new life,” Rhodes said. “And we wanted to rejuvenate the eyesore and help with proper development of the building. Mr. Harmon, through one way or another, was able to raise the funds to satisfy the full amount of our judgment.”

Metro Tower intended to redevelop the Barfield as a mix of apartments, offices and retail stores — a $7-million project, according to 2010 estimates.

But the project announced in 2004 constantly struggled for funding. A promised loan failed to come through after Metro Tower began demolition.

The trustee in Metro Tower’s bankruptcy has filed a motion asking a U.S. Bankruptcy Court judge to either convert the company’s case from a Chapter 11 reorganization to a Chapter 7 liquidation case, or dismiss it entirely.

“There is no reasonable likelihood of rehabilitation,” U.S. Trustee Mary Frances Dunham argued in the motion filed last month.

“... It appears the Debtor has no operations, no cash flow, no employees and three unsecured claims (of outstanding debt). The property appears to have been posted for foreclosure, and filing bankruptcy was the only way to prevent that foreclosure.

“Taking all these factors into account, the Debtor did not file in good faith, which is cause for dismissal.”

Metro Tower also failed to file a monthly report of its financial activity, which the bankruptcy court requires, Dunham said in her Sept. 21 motion. The initial report was due Aug. 20.

During an Aug. 31 creditors meeting, Harmon told Dunham he recently had filed the report.

The meeting, required under federal bankruptcy laws, gave representatives of the Office of the U.S. Trustee and creditors a chance to question the debtor under oath.

Harmon also said the company’s 2009, 2010 and 2011 tax returns recently had been submitted to the IRS.

The Sept. 21 motion filed by Dunham shows the penalty for failure to file the returns appears to total $15,060.

In its initial bankruptcy filing, Metro Tower named $733,696 in liabilities, including the lien by LT Barfield, and two assets, the Barfield and a parking garage at 509 S. Tyler St. Metro Tower placed the combined worth of the two structures at $1.2 million.

The company listed no bank accounts or income streams, more than $40,000 in unpaid property taxes and almost $23,500 in civil court judgments.

Harmon is listed as a co-debtor for those liabilities.

Dunham’s motion states that Potter County has filed a claim for unpaid taxes and costs totaling $47,538.

LT Barfield is a limited liability company composed of Joe Bob McCartt, Alan Rhodes, James W. Wester, Pedro Cunha and Kathy Cornett, all of Amarillo.

The group formed LT Barfield in late May to purchase the right to collect the lien held by Lafayette, La.-based H.R. Megaplex, one of many companies owned by Shreveport businessman Harold H. Rosbottom Jr., who filed for Chapter 11 bankruptcy protection in June 2009.